CNN news 2017-01-18
This January 11th, we're starting with the report on Venezuela. The nation is in an economic tailspin. It's located in South America. It's home to around 31 million people.
And even though its president, Nicolas Maduro, increased Venezuela's minimum wage by 50 percent this week, and even though that was the fifth time the country's minimum wage was increased in the past year, it's nowhere near the price increases of basic necessities, like food for many Venezuelans.
Inflation is when prices go up and money buys less. For perspective, average inflation in the U.S. is around 3 percent per year. In Venezuela, the International Monetary Fund expects inflation will increase by more than 1,600 percent this year and almost 3,000 percent next year. People can't get the medicines they need. Venezuela's bank notes are virtually worthless.
President Maduro reportedly says that Venezuela is the victim of an economic war waged by his opponents. But when Venezuela's government began taking over the country's oil industry in 1976 and eventually became dependent on oil for almost half the government's revenue, the stage was set for a potential crisis if oil prices were to drop.
SUBTITLE: Venezuela's economic disaster.
PAULA NEWTON, cnn INTERNATIONAL CORRESPONDENT: This economic crisis has been years in the making. The socialist government here is being accused of really discouraging investment in this economy. And what's happened over the last years is we've seen severe shortages of food.
What really made things dramatic, though, was when the oil price plunge about a year and a half ago now. Venezuela depends on the selling of oil for almost all of its government income. On top of that, it is now so reliant on imports of almost everything. They are not taking in enough money to pay for all the imports that they need.